The Government has released its 2011/12 Mid-Year Economic and
Fiscal Outlook, which forecasts substantial downgrades to revenue
due to "a significant deterioration in global
conditions."As a result, the Government "has had to find
further savings in the budget", including the following
measures that will apply from 1 July 2012:
The Government will introduce reforms to stop individuals from
being able to exploit the tax exemption for living-away-from-home
allowances and benefits;
The Government will further restrict the Dependent Spouse Tax
Offset (DSTO) to those with spouses born before 1 July 1952 (this
extends the 2011/12 Budget measure, to phase-out the DSTO for most
taxpayers with a dependent spouse born on or after 1 July
The Government will reduce the matching rate and maximum
payment of the voluntary superannuation co-contribution from 1 July
2012, when the new low income superannuation contribution
The drawdown relief for account-based, allocated and market
linked pensions (i.e., a 25% reduction in the minimum payment
amounts for these products), will be extended to the 2012/13 year
(the Government had indicated previously the minimum payment
amounts would return to normal in 2012/13).
Deferral of measures and/or indexation
The Government will also defer certain previously announced tax
reforms by one year, including:
The start date of the standard deduction for work related
expenses will be deferred until 1 July 2013;
The start date of the 50% tax discount for interest income will
be deferred until 1 July 2013; and
The Government will pause the indexation of the superannuation
concessional contributions caps for one year in 2013/14.
ATO crackdown on PSI and ABNs
The ATO has advised that it will effectively be cracking down on
taxpayers who claim to be independent contractors, by
taxpayers who have reported personal services income (PSI) and
who may have incorrectly self-assessed themselves as conducting a
personal services business (PSB); and
data held in the Australian Business Register (ABR), and
cancelling any Australian Business Numbers (ABNs) where records
indicate that taxpayers are not carrying on an enterprise.
They will be focusing on individuals (sole traders) as they
comprise almost 50% of the records on the register. Editor: If you
receive a letter stating that your ABN has been cancelled, contact
us as soon as possible. We may be able to object against the
decision to cancel the ABN and have your registration reinstated.
Alternatively, if you have not yet received a letter but are either
not required to hold an ABN, or have stopped operating the relevant
business, we could pre-empt the ATO by cancelling the ABN before
they do.In relation to the ATO's crackdown on PSI, the main
taxpayers they are concerned about are contractors who receive PSI
(either directly or through an entity) but who are effectively
employees. This issue is important because deductions and reporting
obligations may be affected.
SMSF compliance focus for trustees
The ATO has advised that it has three major focus areas for its
SMSF compliance program:
non or late lodgments (not lodging can result in the fund being
made non-complying or the trustees being prosecuted);
compliance breaches without an auditor contravention report
unrectified ACRs (i.e., where the auditor reports a breach of
the superannuation law that the trustees fail to rectify), and SMSF
trustees making the same breaches the ATO has previously addressed
In addition, the ATO is focusing on:
related-party investments including lending to members;
breaches of the 5% in-house asset limit;
exempt current pension income and non-arm's length
ACRs lodged for SMSFs that are under 15 months old; and
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
Lenders in New South Wales breathed a sigh of relief earlier this month when the Supreme Court ruled in Bank of Western Australia Ltd v. Primanzon  NSWSC 862 that two part-time commercial property investors could not claim relief under the Contracts Review Act 1980 (NSW) because the loans advanced to them were entered into in the course of a trade, business or profession carried on by them.
A key aspect of an innovation culture is keeping it active at all levels of management, from teams to board meetings.
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